Uncovered and Overexposed

As food security climbs the global agenda, one of agriculture’s most essential resilience tools remains fragmented and incomplete. In 2023, just 43.5% of the world’s insurable crop value was covered by insurance. That leaves a protection gap of USD 77 billion. That gap reveals a systemic failure. Entire regions, especially those dominated by smallholders, remain exposed. In others, high formal coverage masks stark inequalities in access. This isn’t just a developing-world problem. It’s a structural flaw in how risk is assessed, priced, and distributed.

Uneven Ground

Insurance coverage remains deeply uneven—and the consequences ripple far beyond any single farm. The US, for example, tops the global crop resilience index with full theoretical coverage, yet the distribution of that coverage is sharply skewed. According to USDA Census data, only 26.5% of farms with cropland carry crop insurance—and among farms under 50 acres, just 9%. The smallest 80% of farms receive only 23% of total subsidies. Specialty crop producers are also excluded, with just 15% insured nationwide.

Brazil, the fourth-largest agricultural producer globally, has expanded its rural insurance subsidy program, yet more than 80% of farmers remain uninsured. The national protection gap hovers around USD 8 billion, and insurance availability remains highly regionalized and difficult to access for family farms.

China, now the world’s second-largest agricultural insurance market with USD 17 billion in premiums, still shows a gap of USD 11 billion—despite 70% coverage on major crops. In India, government efforts have expanded uptake, but the protection gap remains wide—USD 25 billion in 2023—and coverage intensity is still low in rainfed regions.

When Risk Becomes Collapse

The link between crop insurance and food security is no longer theoretical. Countries with higher insurance penetration tend to experience lower levels of food insecurity. This isn’t just about compensation—it’s about continuity. Insurance enables growers to replant after drought, invest ahead of uncertain seasons, and secure credit for the next harvest. Without it, climate volatility becomes existential.

Small and midsized farms are particularly vulnerable. These producers tend to be more diversified and locally embedded. They offer biodiversity and system-level resilience—yet remain structurally excluded from insurance models built for large, monoculture-based operations. That exclusion isn’t just a market failure. It’s a threat multiplier.

Rebuilding the Logic of Risk

Progress won’t come from scaling today’s tools. It will come from rethinking how risk is defined, measured, and priced. We need systems that assess risk where it occurs—field by field, not region by region. That means replacing blunt historical averages with real-time data, predictive modeling, and adaptive pricing structures.

Brazil offers early proof of concept. In recent years, agtech platforms have begun leveraging satellite imagery, AI-based diagnostics, and mobile-first enrollment to expand rural access. These tools have helped increase insurance accessibility by over 30% in some regions, while cutting claim settlement times from months to days. That’s what precision looks like on the delivery side.

But seeing risk and understanding it are not the same. What’s still missing is the intelligence layer that connects what’s visible—satellite data, weather anomalies, crop signals—to what’s insurable. To truly unlock micro-level coverage, insurers need systems that don’t just observe risk, but model it across climate, practice, and price. That’s the design logic behind targeted, scalable insurance.

Parallel efforts are emerging in Asia, where insurers are combining remote sensing, mobile-based claims, and biometrics to reach harder-to-serve segments. China and India show that policy reform and tech modernization can scale together—but even there, the deepest gaps persist among fragmented landholders, dryland zones, and underserved crops.

The Resilience Payoff

Closing the crop protection gap won’t just stabilize farms. It will stabilize systems. A more inclusive insurance infrastructure could unlock a positive feedback loop: as more producers gain protection, systemic shocks become less severe, and insurance pools more sustainable. That, in turn, enables better risk pricing, deeper investment, and more resilient food supplies.

Importantly, resilience isn’t just about bouncing back—it’s about staying in. When small farms collapse, local supply chains fracture. When climate drives out diversified producers, monoculture spreads. When insurance fails to reach the last mile, it reinforces the very inequalities it was built to buffer.

Closing the Gap, System by System

The gap hasn’t closed where it matters most. The real task ahead is not just growing crop insurance markets—it’s rewiring them to reach the growers who matter most: the ones least likely to be covered, yet most critical to resilience.

From the US heartland to the Brazilian Cerrado, from Indian rainfed plots to Indonesian rice belts, this is the missing shield—and unless it’s reimagined, not just expanded—it won’t hold.

Roberta Leão, | Layer 1 Agriculture